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Feds subpoena documents from co-owners of failed nuclear project in South Carolina

COLUMBIA, S.C. — Federal authorities have subpoenaed documents from both companies that abandoned a multibillion dollar nuclear power construction project in South Carolina, the utilities confirmed Thursday, signaling the first concrete evidence of a federal probe into the failure.

In a notice posted on its website, SCANA said that officials were complying with the demand from the U.S. Attorney’s Office in South Carolina that the company and its subsidiaries produce documents related to the V.C. Summer project.

“The subpoena requires the Company to produce a broad range of documents related to the project,” SCANA officials wrote. “The Company intends to cooperate with the government’s investigation.”

In an email to The Associated Press, Santee Cooper spokeswoman Nicole Aiello confirmed that the state-owned utility had received the same request and intended to “fully cooperate with the request for documents.”

SCANA is the parent company of South Carolina Electric & Gas Co. Along with Santee Cooper, the companies spent nearly $10 billion on two new reactors before deciding July 31 to halt construction following the bankruptcy of lead contractor Westinghouse.

The failure left nearly 6,000 people jobless.

A federal probe into the failure has been rumored, and Thursday’s news that Justice Department attorneys had issued subpoenas served as official confirmation of an investigation.

State lawmakers have convened panels looking into the failure, which has cost ratepayers more than $2 billion and accounts for 18 percent of SCE&G customers’ electric bills. A 2007 state law allows SCE&G to recoup its debt from customers if state regulators deem money was spent prudently, but legislators want to stop that.

A 2015 report detailing a litany of problems with the project, from logistical mistakes to inability to reign in contractors, came to light earlier this month. Lawmakers have criticized the utilities’ attempts to keep the report from becoming public, action company officials have said they took because the findings were intended to be used in a potential lawsuit against Westinghouse. During Statehouse hearings, utility executives have continued to blame Westinghouse, which owns the reactor design, for the project failure.

The existence of the report by Bechtel engineering firm became public as executives testified at a legislative hearing last month, with lawmakers threatening to subpoena it if the utilities refused to provide it. Gov. Henry McMaster released the report to reporters earlier this month, over SCANA’s written objections, after receiving a copy from Santee Cooper.

The governor’s office gave a copy of that report to federal prosecutors on September 5, a day after providing it to reporters, McMaster spokesman Brian Symmes said Thursday.

Lonnie Carter, recently retired as Santee Cooper’s CEO, has told senators his utility first “raised concerns” about the project in 2013, causing the utilities to hire Bechtel for the independent analysis.

At least three lawsuits have been filed over the failed project, with plaintiffs accusing the utilities of mismanagement and seeking some sort of compensation for fronting the failed projects for years.